Budget funds are Concept, types and use

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:53

Budget funds play a significant role in the functioning of the country and the fulfillment by the state of its obligations, including social ones. This article describes the concept, varieties, meaning and features of Russian funds.

The concept and meaning of the budget fund

Budget funds are a kind of financial funds created in strict accordance with domestic legal norms. They look like money specially allocated in the budget system, which is spent and controlled by government authorities. As a rule, these finances are accumulated for the subsequent financing of key economic activities of the country.

All budget funds in Russia are subject to the provisions of the current budget legislation. In addition, these structures, regardless of their type, must not violate other legal norms. As a rule, funds are pledged by the executive branch at the federal level, within the boundaries of the law on the national budget for the coming financial year. Moreover, it is allowed to form budget funds not only in the center, but also in the subjects of the Russian Federation, and even inmunicipality. Budgetary funds are replenished through the receipt of money from the treasury, special fiscal contributions from individuals and legal entities, targeted government loans, treasury securities (bills), etc.

Funds play an important role. In particular, budget funds are the monetary basis for the implementation of the tasks and social obligations of the state.

Varieties of Funds

Funds can be classified according to various criteria:

1) According to the presence of a direct connection with the state treasury, there are budgetary and extra-budgetary funds.

2) By direction of use of funds: earmarked and non-earmarked.

3) By level of education: state, funds of subjects of the Russian Federation, municipal.

In addition, according to the form of budget funds, they can be classified into target budget funds; reserve funds and funds created as part of the costs of the treasury of a certain level of government.

Budget funds created to solve a specific problem

Distinctive features of the target budget fund include: the profile orientation of spending the funds stored in it; is formed due to the profit of the intended purpose; the profit coming into it is connected with certain purposes of waste; the receipt of finances and their waste are carried out annually for the entire period of the functioning of the fund; there is a relationship between the duration of the fund and the time of implementation of the task for the implementation of which it was formed. Thus, target budget funds are an organization consolidatingfunds dedicated to specific tasks.

All budgetary funds ceased to exist after the introduction on 26.04.2007 of the law amending the RF BC. However, in the theory of budgetary law, they still exist. The budget funds of the Russian Federation include the national welfare fund, investment and road funds.

The first was the share of the state treasury money, which had to be accounted for and controlled separately to provide additional monetary support for voluntary pension savings of the Russian population and create a balance (eliminate shortage of funds) of the budget in the Russian Pension Fund.

The second of the listed funds was created to provide additional funding for developments that were supposed to attract contributors. According to the budgetary legislation of Russia, funds from the fund were to be spent to implement investment developments.

The Road Fund was formed to provide financial support for the repair and improvement of domestic general highways; overhaul and reconstruction of adjacent areas of multi-storey residential buildings, entrances to the courtyards of multi-storey residential buildings in various cities.

Features of the reserve fund

Reserve budget funds are the share of the state treasury finances, which is accounted for and controlled separately for the oil and gas transfer in case of a lack of profit from the trade in "blue fuel" and "black gold" for monetary supportthis transfer.

The standard size of this fund is set at a certain value, based on 10% of the predicted size of GDP for the coming financial year, reflected in the Federal Law on state revenues and expenditures for the next financial year and the planned period.

The purpose of the management of the Reserve Fund's finances is to maintain the integrity of the Fund's finances and a constant profit from its placement in the distant future. The management of the relevant finances anticipates the possibility of falling income or losses in the near future.

The domestic Ministry of Finance manages the fund's money in the manner determined by the main executive body of the country. Some functions to manage the money of this entity can be performed by the Central Bank of the Russian Federation.

The financial management of the Reserve Fund can be carried out by one or a combination of methods:

By buying a foreign currency for the fund's money and placing it on deposits to record the fund's finances in foreign monetary units (USD, €, British currency) in the Central Bank of the Russian Federation.
By placing the money of the Reserve Fund in foreign financial resources and monetary assets calculated in the monetary units of other states, the list of which is established by domestic legal norms.

The Ministry of Finance of the Russian Federation manages the Fund's money by the first of the listed methods.

General characteristics of off-budget funds

Off-budget funds are independent monetary structures and entities,which for the most part have the legal status of an organization.

Extrabudgetary funds created by the authorities are trust funds with their own funds with a common center, formed outside the state treasury thanks to the financial contributions of organizations and created to fulfill social obligations to the population of Russia (payment of pensions, benefits, insurance, he alth protection and treatment support).

These funds are economically and legally autonomous from the federal, regional and municipal treasury. The financial assets of these organizations are not included in the total amount of profits and expenditures of the state treasury. However, the money of off-budget funds is the property of the authorities, which determine the procedure for their functioning.

Any extra-budgetary fund, unlike target budget funds, works independently of the treasury (more precisely, the connection is not direct, but indirect).

The need to create such structures was due to several reasons. The main reason in the economic sphere is the need to increase the sources of sponsorship by the authorities of the socio-economic needs of the country. In other words, the task of off-budget funds is to take control of the most significant areas of general economic development of the state and the public sector.

The authorities indicate the purpose of the formation of the fund, as well as the procedure for spending its financial assets.

Varieties of off-budget funds

The system of budget funds includes many types of datainstitutions.

According to their working purpose, non-budgetary funds are divided into those that are of a national nature (formed to resolve significant difficulties in the economic sphere as a whole: roads, the environment, the customs industry, reducing crime rates, etc.) and those created to solve a specific problem (formed to finance public needs; education; science; medical sphere; increasing employment of the population). The money of any off-budget fund is placed on special deposits.

Another criterion for division is the level of foundation education: state, subject of the Russian Federation or municipality. Receipt of funds from the fund is carried out exclusively for the solution of certain tasks. At the same time, money for meeting public needs from such funds comes in a much larger amount than from trust funds.

Extra-budgetary funds are also divided into social (for example, RF Pension Fund, FSS, compulsory medical insurance fund) and general economic. In the latter case, as a rule, we are talking about the funds of budgetary institutions. The latter included, for example, the Fund of the Russian Ministry of Atomic Energy; state fund of the Ministry of Taxes and Duties, etc.

The specifics of the work of the Pension Fund of the Russian Federation

The Russian Pension Fund is a fund of financial assets created independently of the state treasury to provide financial security for the protection of Russians from a specific type of social threat - loss of salary (or other stable income) due to the onset of decliningage, disability; for disabled citizens - at the death of the breadwinner; for some groups of employees - the long-term performance of a specific labor task. Financial assets from the PF are prohibited from spending for purposes other than those listed above. Retirement savings include 3 parts: basic, funded and insurance.

The Pension Fund is replenished thanks to such sources as: money from the state treasury; amounts of fines and other monetary pen alties; profit from investing temporarily unemployed finances of compulsory pension insurance; insurance payments for compulsory insurance of pension payments; voluntary payments of citizens and legal entities; other legal sources.

The specifics of the work of the FSS of the Russian Federation

The Public Insurance Fund is second in importance. It is a profile credit and monetary structure under the highest executive body of the country. Its function is to manage the state social insurance funds.

The key goals of creating the FSS can be considered: the payment of federal social assistance to Russians, sending them to resort and sanatorium medical procedures; participation in the creation and implementation of federal programs to protect the he alth of the employed population; carrying out activities that contribute to the financial stability of the fund, establishing the amount of insurance payments; organization of training activities for employees of the federal public insurance structure; partnership with identical foreign organizations and interstate structures in terms of publicinsurance.

The sources of the Fund's financial income are: insurance payments from various employers; insurance payments of people with IP status; insurance payments of Russians employed on other terms; profit from investing the fund's temporarily idle financial assets in bank deposits and high-value federal securities; voluntary payments of organizations and Russians; other profit.

The fund's financial assets are mainly spent on: funerals; providing benefits for temporary loss of the opportunity to work, childbirth and pregnancy, when a baby is born and caring for him until he is 1.5 years old; referral to he alth resorts; other purposes listed in legal regulations.

Specifics of activities of CHI funds

These structures are formed at the level of local authorities to consolidate funds for public he alth. Compulsory medical insurance is an invariable component of federal public insurance and provides every Russian with the same right to treatment with the help of finances from compulsory medical insurance.

For the implementation of measures in the field of medical insurance, state and regional compulsory medical insurance funds are being formed as independent non-profit monetary structures.

Compulsory medical insurance funds are called upon to fulfill a number of tasks: to make the conditions for the functioning of regional compulsory medical insurance funds the same; allocate money for a targeted set of activities within the CHI; check the correctness of the waste of cash assets of the CHI.

At the national levelsources of income to the CHI fund are: shares of insurance payments of economic entities; payments of regional MHI funds for the implementation of joint activities carried out on a contractual basis; financing from the state treasury for the implementation of republican activities of the CHI; voluntary payments of organizations and citizens; profit from the use of temporarily unemployed money from the state compulsory he alth insurance fund, etc.

Budget funds of the state and government agencies

The number of federal budget funds included: monetary assistance funds created as part of the state Russian treasury to solve the problems of the country at a certain stage in the development of the economic sphere. An example is the State Fund for Co-financing Expenditures; fund of monetary assistance to the subjects of the FFPS; state reimbursement fund.

One of the main requirements for the functioning of the state budget fund is mandatory supervision over its creation and targeted use of financial assets placed on its deposits.

The authorities supervise both the legality of the spending of funds and the effectiveness of their use. The structure of such funds in the state treasury is changing. They can be formed or liquidated. This is also true for regional funds.

The budget and budgetary funds have a direct link, unlike similar off-budget structures, where it is indirect.

In addition, it should be said about the special funds of various authorities (for example, the RussianMinistry of Atomic Energy). Their composition is formed from financial allocations for certain tasks. The money is then distributed and spent in accordance with the law. Treasury money is spent mainly on measures that contribute to the continuous operation of such an structure.

Profit is created on the basis of calculations calculated for each source of profit separately.

Use of the budget fund

The spending of cash reserves of the budget fund is prescribed in the legislation. Target budget funds are created thanks to the relevant revenues and can be used exclusively for the transfer of funds for predetermined purposes. All transactions with such finances must be carried out only through the branches of the Central Bank and the main department of the treasury of the Russian Ministry of Finance. Accounting for money is carried out on state deposits created in the Central Bank of the Russian Federation / Treasury. Finances from budgetary funds are inviolable. They are prohibited from being used for commercial activities.